The Oil Drum

Having as they say "The Mandate of Heaven", the Chinese political leadership is now attempting to manipulate the market -- this has been mentioned in other posts here. Latent demand due to higher income remains but oil purchases can be lowered due to policy. Here's some interesting stuff from Bloomberg Oil may average $93 in 2007 reprinted by the Gulf Times out of Qatar. From the Canadian Imperial Bank of Commerce's chief economist

Consumption in China, the second-largest user of oil after the US, and in other expanding Asian economies, is sensitive to rising income and not prices, the CIBC economists said in their report. Per-capita energy use in China in 2003 was about one-tenth of the US rate, according to the US Energy Department.

"About 42% of the growth in global demand is coming from China, where there is virtually no price sensitivity to demand,'' Rubin said in a separate phone interview. "There's a huge relationship to income growth there, but a very uncertain relationship to price at all.''